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Category Archives: 47P Benefits Fraud Victories

State v. Mr. K. (DMC No. 13080 and DMC No. 11324) – Felony Medicare Insurance/Benefits Fraud ($1,500 Misappropriated from Medicare), Felony Fraudulent Schemes and Felony Forgery – Not Charged and Physical Therapy License Not Revoked at Professional Hearing – Arizona Board of Physical Therapy Investigated.

Mr. K worked as an independent homecare contractor regarding services for physical therapy. Mr. K allegedly billed Medicare for 15 home visits on a client in which he only did 7 visits. He was accused of signing the patient’s name on the visit confirmation slips for all 15 visits. He was eventually contacted by the Arizona Board of Physical Therapy regarding allegations of Medicare Insurance Fraud, Fraud Schemes, and Forgery.

We became involved when we represented Mr. K in front of the Arizona Board of Physical Therapy. Discrepancies in the record were clarified and Medicare was made whole. In the end, Mr. K was not charged with any criminal charges and he was allowed to keep his physical therapy license.

State v. Mr. T (DMC No. 13272) – Felony Benefits Fraud ($2,000 Misappropriated from AHCCCS and SNAP) and Felony Fraudulent Schemes – Not Charged – Arizona Attorney General’s Office and Department of Economic Security Investigated (Case No. 20XX-XXXXX3).

Mr. T had been unemployed for 16 months due to a degenerative disc disease and he had been receiving medication and treatment. He sold his home in Colorado and moved to Arizona. When he arrived, he applied for benefits under AHCCCS (Arizona Health Care Cost Containment System) and for food stamps under SNAP (Supplemental Nutrition Assistance Program). When he applied, he failed to disclose that he had one bank account with $3,000, a second one with $17,000, and a third one with $88,000 (which was the result of the sale of his home in Colorado). He also applied for Social Security Disability benefits and was denied.

An Investigator with the Department of Economic Security contacted him about these other accounts and an investigation was opened. Mr. T hired our firm and we then became involved and we pulled all the documentation he had filled out when he originally applied for benefits. We were able to show by way of a neuropsychological evaluation that Mr. T had dyslexia, a somewhat lower I.Q. and did not fully understand the forms he was filling out. Ultimately, DES also got the Attorney General’s Office involved, however, we were able to convince both of them not to file any charges against Mr. T. Originally, he was facing a very serious felony, but he now has no charges on his record.

State v. Ms. G (DMC No. 13474) – Felony Benefits Fraud ($13,700 Misappropriated from AHCCCS) and Felony Fraudulent Schemes – Not Charged – Department of Economic Security and Family Assistance Division Investigated.

Ms. G only had a high school education and was working part-time at a Subway sandwich shop as a sandwich maker. She had multiple health issues which included Type I diabetes, cystic fibrosis, depression, asthma, PTSD, etc. Many of these ailments rendered her partially disabled and she needed assistance from AHCCCS (Arizona Health Care Cost Containment System) in order to received medical care and medication.

While applying for AHCCCS benefits, she did not list all of her income. She omitted the fact that she had a $28,000 annuity/life insurance policy that was left to her by her grandfather. For several years while she was on AHCCCS, she made several withdrawals totaling $13,700, which was a violation of AHCCCS rules and the statute under A.R.S. 23-785. Ms. G suddenly received a letter from DES and the Family Assistance Division asking for an interview as they were conducting an investigation triggered by that annuity.

Once we became involved, we contacted the Investigator for DES and began revealing her total income. We also showed that these draws (spread out over several years) would not have affected her eligibility to receive AHCCCS benefits. Ultimately, AHCCCS agreed to allow her to reapply for benefits with the full disclosure of the balance of the annuity being revealed. Originally, she could have been charged with a very serious felony and lost her medical benefits. However, she was never charged and was able to continue getting her medical treatment and her medications.

State v. Ms. G (DMC 12809) – Felony Benefits Fraud ($8,500 Misappropriated from SNAP), Felony Fraudulent Schemes and Felony Theft – Not Charged – Arizona Department of Economic Security Investigated.

Ms. G was receiving food stamps through the Supplemental Nutrition Assistance Program (SNAP) on and off for about three years. In her application, she stated she had only between $1000 to $10,000 in savings. In reality, she had a 529 college savings account for her daughter which contained $87,000. She also had a UTMA account for her daughter in the amount of $105,000, and a Roth IRA for her children at $34,000. On top of that, she had a traditional IRA for $132,000, and a mutual fund account for herself which was valued at $150,000.

As she began going through divorce proceedings, she realized that the food stamps issue could become a criminal issue. She updated all of her income on the DES website and she ceased using food stamps. However, the DES saw the change on their website and began investigating her regarding the discrepancies. We then became involved and spoke with a DES Supervisor. During the course of speaking with the Supervisor, we indicated that her true income was basically zero when she started going through her divorce proceedings. We also pointed out that many of these accounts were retirement accounts, college payment accounts, or accounts in her children’s name, and not her name. The supervisor agreed with us and indicated that since she is no longer seeking supplemental nutritional assistance, that they would not view the past use of food stamps as a Benefits Fraud. No charges were ever brought against Ms. G. If they were, it could have seriously affected her ongoing custody battle in her divorce case.

State v. Mr. F (DMC No. 13324) – (26 Counts) Felony Benefits Fraud ($6,200 Misappropriated from Unemployment Insurance), Fraudulent Schemes and Theft – Reduced to Misdemeanor False Statements with Zero Days in Jail – Maricopa County Superior Court (Case No. CR2015-000358).

Mr F had previously worked for a credit card processing company which was owned by his parents. He was ultimately let go from that job because of various problems. However, his parents did not tell him that they kept him on the payroll at minimum wage, and then direct deposited those paychecks to a bank account that he did not know about. They did this in order so that their son would not lose health insurance and would be able to pay child support that came out of that bank account. Mr. F, unbeknownst to his parents, then began applying for unemployment benefits.

After that point in time, he went to work for another payment solutions company for approximately 6 year. The company was audited by the Department of Economic Security’s Inspector General, Fraud Department, Criminal Investigator. It was discovered that Mr. F had received approximately $6,200 in benefits for unemployment while he was on his parents’ payroll. We became involved in the case and immediately contacted the Assistant Attorney General who was handling the prosecution. We explained the situation and made full restitution as quickly as possible. The Prosecutor still felt that Mr. F should have known he received benefits for 26 months, because his child support payment was still being made. However, he agreed to dismiss all but 1 Count of False Statements per ARS 23-785, which was amended down to a Misdemeanor, and included a $166 fine. Mr. F was originally facing quite a bit of prison time, but it was ultimately resolved with a small fine and no jail whatsoever, and he only has a Misdemeanor on his record.

Mr. W had gone through a divorce and his ex-wife lived with their child in California. He would have the child over Christmas break and in the summers. He applied for benefits through AHCCCS (Arizona Health Care Cost Containment System) for healthcare and for SNAP (Supplemental Nutrition Assistance Program) for food stamps. He included his daughter as a full time dependent and resident and part of those benefits. Over time, he received more than $10,000 in benefits.

An Investigator for AHCCCS began looking through the case and called Mr. W. He told the Investigator that his child did live with him, however, he could not remember the name of the grade school the child attended. The Investigator then called the mother who confirmed that the child lived with her year-round, except for summers and during the Christmas break. Ultimately, Mr. W was charged with 8 Counts of Unlawful Use of Food Stamps/Benefit Fraud, 2 Counts of Fraud Schemes and 2 Counts of Theft. Cost of the actual loss and investigation came to a grand total of $11,521.

Once we became involved in the case, we began having Mr. W repay the government all of the money that they had lost. We informed the Prosecutor of this and we also sent over a mitigation package. That mitigation package included letters from family, friends and coworkers, totaling 40 in number. Due to the great amount of community support, combined with a lack of any real criminal history, the Prosecutor agreed to extend an offer for Attempted Fraudulent Schemes as a Class 6 Undesignated Felony which allowed Mr. W to earn a Misdemeanor. It also included Probation with zero days in jail. Initially, Mr. W was facing well over a decade in prison if convicted on all charges and sentenced to the maximum consecutive punishment.

Mr. W worked as a Banquet Captain for the Omni Hotel Management Corporation for years. For a period of 117 weeks, he collected Unemployment Benefits as if he was unemployed. When he would get work, he was supposed to report any earnings he received. He only reported earnings 17 times out of the 117 weeks, and all of those earnings were underreported. He was ultimately contacted by an Investigator, and he claimed that he only had sporadic work, when in reality, he was working full time. He never sent a letter of explanation, which they had requested.

Ultimately, Mr. W was charged with 35 Counts of False Statements in order to obtain benefits (Benefits Fraud), 1 Count of Fraudulent Schemes and Artifices and 1 Count of Theft. If he was convicted of all counts and given the maximum, he could have spent more than 80 years in prison.

After Mr. W became our client, we contacted the Assistant Arizona Attorney General handling the case and we worked out a restitution plan. In exchange for fully paying back all of the amount of the loss plus interest (just over $26,000), the Prosecutor agreed to dismiss all but 3 Counts of False Statements and offered a Class 6 Undesignated Offense, with a possibility of it being designated as a Misdemeanor on the date of Sentencing. At Sentencing, we were able to show the Judge that Mr. W was remorseful and appreciated the wrongfulness of his actions. In addition, we showed that he had a lack of criminal history, that he had good character, had performed prior good acts, and that he had cooperated and behaved appropriately during the pre-trial and pre-sentencing period of the case. The Judge agreed with us and immediately designated Mr. W’s case as a Misdemeanor on the date of Sentencing.

Ms. K was in the Air Force from 1981 through 2001 and received an Honorable Discharge. She was initially rated at 90% service-connected disability for various medical conditions from 2001 to 2003. Then from 2006 until 2014, she was rated at 100% medically disabled. She had vowed that she was unemployable.

Just prior to 2007, she applied to the Veteran’s Administration for increased compensation based on her unemployability. She stated that she formerly was employed by a large airline as an Operational Manager but had recently become 100% unemployed. The VA approved her for $2,560 a month from that point forward. From approximately January 1, 2007 to February 1, 2014, she received a total of $90,579 in Disability Benefits.

What she failed to do was update the VA that she had gained employment from late December of 2006 through February 7, 2014 and was working fulltime. Because of this Benefits Fraud, she was subsequently charged with 1 Count of Fraudulent Schemes, 1 Count of Theft, and 3 Counts of Forgery.  If we would have proceeded to Trial and lost on all 5 Counts, she could have received up to 68 years in prison.

We were able to use significant mitigation to Ms. K’s benefit. We were able to show the Prosecutor that she had no prior felony convictions, that she was a single-parent mother and was an active member in the Baptist Church, and she had a fairly- outstanding military career that left her somewhat disabled mentally (which may have played a part in her crime). She cooperated fully in the investigation and truly had remorse. Ultimately, we negotiated a deal that could have allowed the Judge to have sentenced Ms. K up to 9 months in jail. In the end, the Judge sentenced her to Probation with 6 months of jail and the ability to be released daily for work under the Work Furlough Program.

Mr. F came to our office and retained our services in December of 2013. He had been employed by the Maricopa Integrated Health System (MIHS) in the Facilities Operations Department as a Supervisor of General Maintenance. The FBI had received a tip that, beginning on January 1, 2012 and continuing through December of 2013, Mr. F had been using his position in authority to obtain goods from vendors who contracted with the MIHS. Initially, it was thought that he had usurped $62,000 of the government’s money as follows: $7,300 in false billing for groundskeeping and concrete work; $14,900 for appliance purchases; $9,800 for HVAC tools; $5,200 for lumber purchases; $600 for paint; $18,900 in construction supplies; $4,100 from Home Depot; and $980 in goods purchased from other retailers.

The allegation was that Mr. F had developed a pattern of living beyond his means and that he was remodeling his home with government money. Because we began cooperating with the government almost immediately, over the course of the next 2 years and 3 months, we were able to trace back all of the money (which now totaled $119,600), which also helped the government fix the leaks within the system. Ultimately, it was agreed that Mr. F would plead guilty to Conspiracy to Commit Theft Concerning Programs Receiving Federal Benefits under 18 U.S.C. 371. He ultimately received a sentence of Probation with zero days in jail. Initially, he was facing over 5 years of prison time.

Felony Benefits Fraud ($50,800 Misappropriated from SSI), Felony Fraudulent Schemes and Felony False Swearing Reduced to Probation with Zero Days of Actual Jail – State v. Ms. M (DMC No. 12750) (Maricopa County Superior Court CR2014-002739): Ms. M was born without part of her arm.  She was on SSI Benefits and had to fill out regular forms with the Social Security Administration.  She became married to a gentleman who made good money, and who owned several houses.  In addition, she received a $250,000 civil settlement (which left her with $100,000 after attorney’s fees and cost).  She did not report any of these to the Social Security Administration and, in fact, signed forms stating she was not married and had no other income.

When she was interviewed by the Social Security Agency, she denied being married.  When they showed her a copy of her marriage certificate, she broke down and confessed to the entire scheme.  She was then charged with Fraudulent Schemes Involving Benefits Fraud, Theft and False Swearing.  If all charges were run consecutively and she was sentenced to the maximum, she would do almost 30 years in prison.

We became involved and we were able to show some of the hardships that Ms. M had faced.  We also showed through Mitigation that she was truly remorseful and was now seeking counseling to deal with the loss of her arm and medical situation. Ultimately, we were able to get the charges reduced and the Judge sentenced Ms. M to probation with Zero Days of Actual Jail.

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